Maximizing Savings Through NJ Property Tax Appeals

by: Anthony F. Della Pelle
25 Aug 2016

When was the last time you thought about how much you’re paying in property taxes on your New Jersey home or investment property? If there haven’t been major changes to your lot or building over the past few years, it may seem like there is no point in doing so.  A number of factors, however, can impact your tax assessment, even while your property remains physically unaltered. Listed below are four of these factors and how they can help lower your property tax assessment:

Fluctuations in Real Estate Markets

Property values are always changing—areas that experience a notable increase in prices one year may experience a contraction the next, and vice versa. As a property owner, it’s important for you to monitor market conditions to ensure that you don’t pay more than what’s necessary in taxes. Don’t get stuck paying for yesterday’s rising real estate prices if your local market has been declining in recent years.

Changes in Your Surroundings

Just as market conditions are out of your control, your physical surroundings are equally as unpredictable. For example, if the vacant land next to your building is suddenly developed into a loud factory, that could seriously affect the market value of your property. In situations where outside development affects the desirability of your property, filing an appeal may lead to tax savings.

Errors in Assessors’ Records

Believe it or not, it’s not unheard of for New Jersey municipalities to keep false records that could potentially impact how much you pay in property taxes. For example, if your building is 8,000 square feet, there’s a possibility your local municipality has it listed at 9,000. Or, in the case of a residential home, your assessor’s office may think you have 3 bathrooms when you only have two. In either case, you shouldn’t pay more than your fair share in taxes because of inaccurate record keeping.

A Shift in Economic Conditions

If recent economic changes have affected the way you use your building, filing a tax appeal may lead to a reduction in your assessment. For example, if a recent decrease in demand for a certain product has led you to cease production of that product, the machinery used to make it becomes a burden on the property’s value.

The author acknowledges the assistance of John Oettinger, a summer intern at McKirdy & Riskin, in preparing this article.  Mr. Oettinger is a member of the Class of 2018 at the University of Michigan’s Ross School of Business.